Lewis v. Dwight

Williams, J. The question in this case depends upon the extent of the obligation assumed by the defendants, and the true construction of the bond on which the suit is brought. The defendants claim, that they only undertook, that Nash would pay the plaintiff 1500 dollars, if he owed so much ; and that any sums paid by Nash since the date of the bond, are to be deducted from the 1500 dollars. They further claim, that the notes payable to Dwight & Clark and to Porter Prescott, and by them indorsed to Dwight, are not debts due, within the meaning of the bond ; and further claim, that the plaintiff cannot recover interest beyond the penalty of the bond. The plaintiff claims, that the bond was in nature of a continuing guaranty for the sum of 1500 dollars; and that it extended to any debts which Nash might owe Dwight to that amount; and that after it was really due from the defendant, he ought to pay interest upon it. The bond is dated December 4th, 1829. The debts now due, are two notes, dated November 1829, payable to Dwight & Clark, or order, and endorsed to Dwight; and one note, dated March 8th 1830, payable to Porter &p Prescott, or order, and endorsed to the plaintiff, on 12th of March J 8¾0; which debts are now in judgment on suits in favour of the plaintiff against said Nash. Other debts due from Nash had been paid since the date of the bond. If those payments should have been deducted from 1500 dollars ; or if those debts endorsed to the plaintiff are not secured by the bond; or if no — 100 — interest should have been allowed ; then the judgment is erroneous. On the part of the plaintiff, it was claimed, that sureties are to be favoured. No strained construction is to be adopted to subject sureties; but the contract of a surety must, like all contracts, be construed according to the intent; and the question is, what is the fair import of the language of the guaranty 1 Hargreave v. Smee, 6 Bing. 244. (19 Serg. & Lowb. 69.) In this case, the instrument is a bond. The language is, “ to pay all sums and sum of moneys, responsibilities, debts and dues, which the said Nash may owe the said Dwight— the full and just sums of such debts, dues and obligations, equal to the above sum of 1500 dollars, either contracted already, or which may hereafter be contracted.” This is very broad indeed : all sums of money, (all) responsibilities, (all) debts, (all) dues ; not those only now due, but which said Nash may owTe said Dwight; clearly implying, which he may in future owe, equal to the above sum of 1500 dollars. But to remove any doubt as to the extent, it is added “ either contracted already, or which may hereafter be contracted.” Here is no limitation, except as to amount. It is as broad as the relation which may exist between the parties. It is not confined to bonds, or goods sold, or moneys lent, or debts due from Nash alone, or debts due to Dwight alone, but seems to have been intended to be as extensive as their dealings, and to embrace every transaction, future as well as present, which should arise between them. It would certainly extend to notes endorsed by Dwight. I see not why it may not include notes endorsed to him. Such a debt is a debt due to Dwight, as much as any other. That is the criterion the parties have chosen to adopt; and it is not for the court to restrict it. If indeed, as was suggested, notes were bought up in this way, for the purpose of subjecting a surety, when the principal had become bankrupt, it might be doubted whether this was not a fraud upon the surety ; or where it was done merely to shape a case to the guaranty. No such thing has been shown here; and the Court are not to presume it, any more than they will presume, that the notes were taken expressly for the accommodation of Nash, in which case they would seem to be as fairly within the intent of the guaranty as if the money had been lent to him to take them up; which may have been one of the — 101 — Very objects contemplated by the parties, when the bond was given. The notes, then, held by indorsement, are within the guaranty. The next question is, does the guaranty extend to 1500 dollars, which might be due when Leivis is called on, or only to the first 1500 dollars due ? Or, is it in náture of a continuing guaranty ? It is claimed, that the words “ equal to 1500 dollars,” limit it to the first sum of 1500 dollars. These words are equivalent to the words to the amount, or to the extent, of 1500 dollars : and these are the words ordinarily used in such cases. Equal to 1500 dollars, is only a limitation of the sum to that amount, expressed in language not technical. Again, it is objected, that as no timéis fixed, the party must always continue a liability to that amount. This argument, if allowed, would have often defeated a continued guaranty, because it is not uncommon that there is no limitation but that of amount; and the broad language of this bond, certainly, seems to intend something more than security for the first 1500 dollars Nash might owe: were not the sum limited, it would be a general security for all debts Nash might contract with Dwight. Now it is limited so that is a general security to the amount of 1500 dollars only. The intercourse between individuals varies so much, that it is hardly to be expected, that different parties should use the identical language of each other. But words of a similar import, it is believed, have been held to constitute a continuing guaranty. Thus, where the defendant engaged with the plaintiff to guarantee him for any goods “ he hath or may supply my brother W. P. with,” to the amount of 100Z., it was construed to extend not merely to the first 100Z., but to goods delivered to that amount so long as the parties dealt together. Mason v. Pritchard, 12 East, 227. S. C. 2 Camph. 436. In Woolley & al. v. Jennings & al. 5 Barn. & Cres. 165. (11 Serg. & Lowb. 187.) a warrant of attorney was given to secure the payment of 400Z. with interest; although more than 400Z. had been paid, it was held, that the warrant was to be construed a continuing guaranty. “ I hereby guarantee the payment of any bill or bills of mer — 102 — chandize Mrs. Philips has purchased, or may purchase, the -amount of this guaranty not exceeding 200 dollars, and to expire at the end of one year,” was held a continuing guaranty. Clark v. Burdett, 2 Hall's Rep. 197. So where the defendant engaged to the plantiffs, if they would credit E. D. a sum not exceeding 500 dollars, in case he did not pay the same in twelve months, he, the defendant, would pay the same himself; the plaintiff delivered E. D. 500 dollars and various other sums, and received several payments, which he applied to the other sums; it it was held, that the defendant could not object to that course. Sturges & al. v. Robbins, 7 Mass. Rep. 301. It is claimed by the defendant, that the case of Kirby & al. v. Duke of Marlborough & al. 2 Mau. & Selw. 18. is opposed to the plaintiff’s claim. There, the recital in the bond was, that “ whereas C. had occasion for divers sums of money, not exceeding 300i. in the whole, and had applied to the plaintiff,” &c. ; and the bond was, to secure such advancement, not exceeding 300/.: it was held, that 300/. being advanced, the bond was functus oficio. There, the plain intent was, that the party should receive but 300/. The bond in question does not limit the advance to 1500 dollars, but it does limit the defendant’s liability to that sum. It has been further contended, on the part of the defendants, that it does not upon this bond appear, that Lewis was a surely for Nash; and that the words of the bond are, that if Nash and Leicis shall pay 1500 dollars, it shall be void, and that as Lewis could only be compelled to pay 1500 dollars, a payment by Nash must have the same effect as if made by Lewis himself. In answer to this, it is to be remarked, in the first place, that although in the bond Lewis .is not called a surety, yet the facts therein disclosed evince it as fully as if he were so called. The debts for which he is to be responsible, are not his debts, or the debts of himself and Nash, but they are Nash’s debts ; and if he pays them, enough is here shewn to entitle him to recover of Nash as money paid for his use. It follows, then, that the obligation he assumes is merely that of a surety. And if he is a surety, and the guaranty in nature of a continuing guaranty, he must be liable for the sum of 1500 dollars, if that sum remains unpaid. The bond is for 1500 dollars, to secure all sums that are or — 103 — may be due from Nash to Dwight. His liability, however, is not to exceed 1500 dollars. If the condition had been drawn in the usual manner, that if said Nash should pay all such debts, &c. then the bond should be void, and it was a continuing guaranty, it would compel Lewis to pay all such debts, not exceeding 1500 dollars, as should remain unpaid. Then Nash’s payment would not lessen Lewis’s liability, if 1500 dollars remained unpaid ; and if so, it is not easy to see how the fact that the draughtsman has introduced the name of Lewis with that of Nash (“ that if said Nash and Lewis shall pay”) shall diminish or even change Lewis’s liability. We must again go back to the question of its being a continuing guaranty. If it is, and Leivis is a surety, he must be responsible for Nash’s failure to that amount; and Nash’s payment, unless it reduces the debt to less than that amount, cannot affect his liability. It was further claimed, that the court erred in allowing interest beyond the penalty of the bond. Whether any thing can be given by way of damages beyond the penalty, in an action of debt on a bond, has been much litigated in England, (note to Hellen v. Ardley, 3 Car. & Payne, 12. 14 Serg. & Lowb. 187.) and finally settled, by this court, that interest thereon might be allowed after the debt became due. Carter v. Carter, 4 Day 30. A similar opinion has been expressed, by Judge Story ; (The United States v. Arnold, 1 Gal. 348. 360.) which seems to have been acquiesced in, in the supreme court of the United States, (9 Cranch 104.) and was confirmed in the case of the Bank of the United States v. Magill, 1 Paine 659. S. C. in error, 12 Wheat. 512. It is said, however, that this case is to be governed by the laws of New- York ; and that there the contrary doctrine prevails. There is nothing on this record to show, that it is to be governed by the laws of New- York ; nor is there any such evidence of that law as would induce me to believe that it differed from our own. The case cited from that state proves, indeed, what is not denied, that as a general rule, the party, especially a surety, is not to be subjected beyond the penalty of a bond. The court say, that the weight of authority is against such a recovery ; at any rate, nothing beyond the penalty and interest. Of — 104 — course, there is nothing in that opinion decidedly against the doctrine adopted in our courts. I think, therefore, there is nothing erroneous. The other Judges were of the same opinion, except Peters, J., who was absent. Judgment affirmed.